Sector Analysis | Pharmaceutical 1

SECTORAL ANALYSIS

INDUSTRY OF BANGLADESH
SECTOR ANALYSIS

A Course Requirement of Managerial Economics (E501)

Prepared for
Ms. Tasneema Afrin
Assistant Professor
Institute of Business Administration
University of Dhaka

Prepared by
Maliha Nusrat Arpa | RQ-61
Md Shahriar Islam | ZH-68
Nadia Afroze Disha | RQ-74
Nishat Tasnim Rumpa | RQ-80
Mubasshir Tahmid | ZH-90

Institute of Business Administration, University of Dhaka

June 20, 2021
June 20, 2021

Ms. Tasneema Afrin

Assistant Professor
Institute of Business Administration
University of Dhaka

Dear Miss:

Subject: Submission of Term Paper

We, group 3, would like to take this opportunity to present to you our second term paper titled
“Sector Analysis: Pharmaceutical Industry of Bangladesh” as part of the Managerial
Economics (E501) course requirement. The main purpose of this paper was to present a brief
review of the pharmaceutical industry of Bangladesh.

In the development of this paper, we have tried our level best to follow the guidelines you provided
us with and to comply with your lofty standards. We sincerely hope that this paper meets your
expectations.

Please note that this report has been prepared under your supervision. Under no
circumstances will this report be produced for any other MBA (IBA) course ever. No part of
this report will be shared or republished without your authorization.

Sincerely yours,

Maliha Nusrat Arpa RQ-61

Md Shahriar Islam ZH-68
Nadia Afroze Disha RQ-74
Nishat Tasnim Rumpa RQ-80
Mubasshir Tahmid ZH-90

Group 3
Section B
MBA 62D
Institute of Business Administration
University of Dhaka
Firstly, we would like to acknowledge the support of our course instructor, Ms. Tasneema Afrin,
for her constant patience and helpful feedback in shaping the direction and tone of this term paper.
Despite undergoing a surgery amid a global pandemic, Miss never lost momentum in delivering
her lectures, holding regular assessment tests and assigning projects to us. Thanks to her brilliant
designing of the course and high level of preparedness during every class, Zoom classes never
seemed soulless. We hope the work we have produced in this paper delivers on her standards and
expectations.

Next, we would like to express our gratitude to our classmates from MBA 62D and other fellow
IBAites who were kind and patient enough to have helped us with their knowledge and
understanding of the topic of the paper whenever we felt the need for help.

We also are thankful to each other in our group for going the extra mile while working on this
paper. Completing a task just for the sake of it and committing oneself to the accomplishment of
the goal of the task without compromising with its quality are two entirely different things; we are
glad our group believes in the latter.

Last but not least, our sincere thanks go to our family members who provided us with every kind
of support that we needed while working on the term paper.
 EXECUTIVE SUMMARY vii

INTRODUCTION 01
1.1 Origin of the Report 01
1.2 Objectives 01
1.2.1 Broad Objective 01
1.0 1.2.2 Specific Objectives 02
1.3 Methodology 02
1.4 Scope 02
1.5 Limitations 02

SECTOR ANALYSIS | PHARMACEUTICAL 03

2.1 A Brief Overview 03
2.1.1 General Overview 03
2.1.2 Market Overview 03
2.1.3 Product Overview 03
2.1.4 Historical Background 04
2.1.5 Economic Overview 05
2.1.6 Key Growth Drivers 08
2.0 2.1.7 Drug Regulatory Authorities in Bangladesh 11
2.1.8 Market Scenario 11
2.1.9 Competitive Structure 12
2.1.10 Export Scenario 14
2.2 COVID-19: Impacts and Aftermath 16
2.3 Strengths and Challenges 18
2.4 Opportunities and Way Forwards 20
2.5 Future Prospect 22

3.0 RECOMMENDATIONS AND CONCLUSION 23

REFERENCES 25
APPENDIX A
Figure 2.1 Pharmaceutical Industry Annual Growth Rate (%) (2009 05
– 2018)
Figure 2.2 Quantum Index of the Pharmaceutical Industry (Base 06
Year 2005-06 = 100)
Figure 2.3 Pharmaceutical Industry’s Contribution to GDP of 07
Bangladesh
Figure 2.4 Nominal GDP vs. Pharma Industry Growth Rate 07
Figure 2.5 Per Capita Healthcare Expenditure, PPP (Current 08
International $)
Figure 2.6 Out-of-pocket Healthcare Expenditure (% of Current 09
Healthcare Expenditure)
Figure 2.7A The population of Bangladesh (in Million) 10
Figure 2.7B Urban Population (% of Total Population) 10
Figure 2.8 Market Share of the Pharmaceutical Companies in 12
Bangladesh
Figure 2.9 Competitive Structure of the Pharmaceutical Industry 13
Figure 2.10 Pharma Export in Mn USD and Growth 14
Figure 2.11 Export Destination of Pharmaceutical Products (in 15
Million USD, 2018-19; 9 Months)
Figure 2.12 Export of Major Players in Mn BDT 15
Figure A1 Market Size of the Pharmaceutical Industry A

Table 2.1 Pharmaceutical Industry of Bangladesh Before 2009 04

Table A1 Comparison of GPD grwoth and Pharmaceutical A
industry growth in Bangladesh
Sector Analysis | Pharmaceutical vii

The main aim of this study was to present a brief review of the pharmaceutical industry of
Bangladesh. Data collection method for this paper has been both primary and secondary in nature.
This paper is limited to the analysis of the pharmaceutical industry of Bangladesh, so comparisons
between the performance of this industry in Bangladesh and that in other countries are beyond its
scope.

The pharmaceutical industry of Bangladesh is the most promising in terms of establishing an

export-oriented industry and making it more diversified. It is the second highest contributor to the
national exchequer. It is the largest white-collar labor-intensive employment sector. The country’s
pharmaceutical industry is nearly self-sufficient; 98% of demand is met by local production. The
industry produces 80% generic drugs, 20% patented drugs. Historical 5 years CAGR is 15.6%,
which shows great potential. It has maintained good growth (10-15% last few years). This industry
has 1.83% contribution to GDP. The industry is expected to be valued at $5.11 billion by 2023. It
is largely dominated by the top six pharmaceuticals firms as they possess more than 50 percent of
the total market share. The market is highly saturated with many local companies operating in the
market. Outside the top 20 companies, these 200+ small companies combinedly possess less than
15 percent of the total market share. The top companies are exporting the generic medicines outside
the country as well. The export amount is significantly increasing over the years.

The Pharmaceutical industry, being one of the fastest growing sectors, has witnessed a
significant slow growth in 2020 due to the global Covid-19 pandemic. This drug market had a
growth of 6.5 percent in the third quarter of 2020 in comparison with the previous growth rate of
10-12 percent. After the uplift of countrywide lockdown, and export complications, the industry
started to turn around and saw a boom in local and global markets by producing anti Covid-19
medicines and hygiene products. This industry also poses a promising potential of producing,
distributing, and exporting Covid-19 vaccines.

Though the pharmaceutical sector of Bangladesh is seeing a steady growth over the years and
especially during the Covid-19 pandemic, the sector is plagued by various challenges like
dependence on imported raw materials, regulated markets, lack of testing facility, export,
marketing and power related issues and also different difficulties that arose with the pandemic.
Despite different challenges the pharmaceutical sector has huge opportunities ahead. The patent
exemption of drugs worth more than USD 251 million is a huge opportunity for Bangladesh and
the possible vaccine manufacturing, API park establishment and government initiatives to
eradicate trade barriers make the sector a huge prospect for the upcoming future. Bangladesh can
take on these opportunities as it has a strong base of low-cost labor, perceived quality and positive
global image about its products, low utility cost, and there is an overall change in the lifestyle, life
expectancy and per capita income with the economic growth of the country. These are the main
drivers of domestic market consumption growth. New investment in the business, as well as the
use of contemporary technologies, has expanded production capacity of the industry.
Sector Analysis | Pharmaceutical 1

Since the early 1980s, the pharmaceutical industry of Bangladesh has been making phenomenal
contributions to the transformation of the national economy. Historically, Bangladesh has always
been a poor country. For much of 1971, the country had to fight for its independence; as a result,
over the following years, the economy of the nation was in a shambles. A vast archipelago of
poverty and deprivation, Bangladesh was one of the poorest countries in South Asia, described as
a “basket case” by the then-U.S. National Security Adviser Henry Kissinger.

Today, as the country celebrates 50 years of independence, it has become a case study in economic
development that few would have predicted. Once poorer than India and Pakistan, Bangladesh
now has a GDP per capita that closely rivals that of India and significantly exceeds that of Pakistan.
Besides being a leading global exporter of RMG, Bangladesh is thriving in the pharmaceutical
industry both locally and globally. 300 companies belonging to this industry, several of which
conduct research, now meet 97% of domestic demand and are beginning to export globally (Basu,
2021). According to a report titled "Bangladesh Pharmaceutical Market Future Opportunity
Outlook 2025" from a Dublin-based market insight and analysis firm, Research and Markets,
Bangladesh’s pharmaceutical market has been enjoying tremendous growth in recent years and is
expected to surpass $6 billion by 2025 with an absolute growth of 114% from its 2019 levels
(Chakma, 2020).

The first part of this paper – Introduction - includes its broad and specific objectives, data
collection methods, scopes of the analysis, and limitations faced in carrying out the research. The
second part - Sector Analysis | Pharmaceutical Industry of Bangladesh - briefly describes and
analyses the trends observed in the pharmaceutical market in Bangladesh over the last ten years,
various challenges and limitations faced by the sector during this period, its future prospect and
the impacts of COVID-19 on this industry. The third part –Recommendations and Conclusion –
presents a summary of the report as well as a few recommendations to help the pharmaceutical
industry of Bangladesh reach greater heights of success.

This report was assigned to us as by our course instructor, Ms. Tasneema Afrin, as part of the
Managerial Economics (E501) course for the MBA program of Institute of Business
Administration, University of Dhaka.

This paper has been developed with the following objectives in mind.

In broad terms, the objective of this paper is to present a brief review of the pharmaceutical industry
of Bangladesh.
Sector Analysis | Pharmaceutical 2

The specific objectives of this paper are –

to briefly describe and analyze trends observed in the pharmaceutical market of Bangladesh
over the last ten years;
to briefly describe the various challenges and limitations faced by this sector during this period;
to discuss the various impacts of COVID-19 on this industry;
to make predictions as to the prospect of the industry in the upcoming years;
to identify potential challenges on the way forward as well as ways of overcoming those
challenges and
to offer a few recommendations to help this industry reach greater heights of success.

Data collection method for this paper has been both primary and secondary in nature. For primary
data, a few professionals in the pharmaceutical industry were interviewed while for secondary
data, exhaustive reviews of digitally available news and reports on the official websites of
Bangladesh National Portal, Bangladesh Bureau of Statistics (BBS), World Health Organization
(WHO), the World Bank, United Nations Development Programme (UNDP), Asian Development
bank (ADB) and many more were conducted. Moreover, many national and international journals,
textbooks, reference books, newspapers and magazines that explored the topic of the paper were
used for the collection of secondary data.

This paper is limited to the analysis of the pharmaceutical industry of Bangladesh, so comparisons
between the performance of this industry in Bangladesh and that in other countries are beyond its
scope. The time horizon for this study is 2010 to 2020.

This study has its limitations which must be kept in consideration when using it as a reference to
further analysis. Firstly, because the paper discusses the performance of the pharmaceutical
industry only in Bangladesh, a comparative analysis of how this industry has been doing in
Bangladesh and in other countries (especially the neighboring ones such as India and Pakistan)
was not included in the paper. Any future work focusing on this particular issue should keep this
limitation in mind while using this paper as a reference. Secondly, several important data related
to the pharmaceutical industry were not available on the national/local websites such as BBS.
Some of these data are available only in physical copies and thus, could only be accessed through
visits to the public libraries. However, the second wave of COVID-19 and the resulting lockdown
all over the country made this impossible.
Sector Analysis | Pharmaceutical 3

This section briefly describes and analyses the trends observed in the pharmaceutical market in
Bangladesh over the last ten years, various challenges and limitations faced by the sector during
this period, its future prospect and the impacts of COVID-19 on this industry.

Bangladesh's pharmaceutical industry is one of the most advanced hi-tech industries in the country.
It researches, develops, manufactures, and distributes medicines and pharmaceuticals for medical
purposes. Pharmaceutical firms can deal with generic and brand-name drugs as well as medical
equipment. They must follow several rules and regulations when it comes to patenting, testing,
and guaranteeing the safety and efficacy of medications, as well as selling them. Consumer Health,
Animal Health, Nutritional Products, and Medical Devices/Diagnostics are all business sectors in
which most major pharmaceutical firms operate.

According to the Bangladesh Association of Pharmaceutical Industries (BAPI) and the Directorate
General of Drug Administration (DGDA), Bangladesh had around 257 licensed pharmaceutical
factories, with about 150 of them operational in 2011. Currently, there are over 300 pharmaceutical
firms in operation. Around 98% of local demand is met by these manufacturing businesses. To
fulfill the remaining 2% of demand, specialized products such as vaccinations, anti-cancer
medicines, and hormone drugs are imported.

As pharmaceutical firms focus largely on branded generic final formulations, utilizing both
imported and domestically produced Active Pharmaceutical Ingredients, around 85% of the
medicines supplied in Bangladesh are generic, and 15% are patented (APIs). More than 450
generic medicines are produced in the nation for 5,600 recognized brands. In Bangladesh,
however, there were 1,495 wholesale drug license holders and over 37,700 retail drug license
holders.

In 2018, the sector had 3,657 allopathic generics, 2,400 registered homeopathic medications, 6,389
registered Unani drugs, and 4,025 registered Ayurvedic drugs, according to the Director General
of Drug Administration (DGDA).

Tablets, capsules, liquid preparations, dry suspension, injections, ointment/cream, nasal spray,
anti-ulcerates, fluoroquinolones, anti-rheumatic nonsteroid medicines, non-narcotic analgesics,
antihistamines, and oral anti-diabetic treatments and granules in sachets have all been created in
the nation. Bangladesh can make inhalers, prefilled syringe injections, lyophilized injections, dry-
powder inhalers, and sustained-release formulations. On a small scale, Bangladesh produces high-
Sector Analysis | Pharmaceutical 4

tech pharmaceuticals such as anticancer therapies, hormone products, enzymes, and coenzymes,
although it can only fulfill 4% of Bangladesh's local requirements.

Bangladesh's pharmaceutical industry has become one of the country's propulsive industries for
export. There was hardly any pharmaceutical industry in Bangladesh before the country's liberation
(then East Pakistan). However, a few indigenous pharmaceutical businesses began operations in
the 1950s and 1960s. Despite this, the government was unable to increase budgetary allocations
for the improvement of the health sector after several years of independence, because the sector
was dominated by multinational corporations, while local businesses lacked proper infrastructure,
modern equipment, and technology. Furthermore, there was no regulating authority in place.

The majority of the population lacked access to life-saving medications. According to the World
Bank's World Development Report, a substantial percentage of Bangladesh's population had
limited access to modern medications in the early 1980s. In 1981, the national market for allopathic
medicines was at US$75 million, accounting for less than 0.1% of the global market.

The pharmaceutical industry began to improve in the 1980s. It has grown at a rapid pace during
the previous two decades. The growth of this industry was accelerated by the passage of the Drug
Control Ordinance in 1982. The pharmaceutical experts' professional knowledge, opinions, and
innovative ideas are the driving forces behind this progress. Between 1982 and 2005, the National
Drug Policy (NDP) had a significant influence on the establishment and expansion of Bangladesh's
pharmaceutical sector. Because the NDP benefited local pharmaceutical businesses, they began to
expand their operations. Meanwhile, multinational corporations (MNCs) transferred their
commercial interests to local firms.

Table 2.1: Pharmaceutical Industry of Bangladesh Before 2009

Government Spending BDT 1,500 million per year
Number of Brands in the Market 3,500
Number of Manufacturers 177
Multinationals 8
Retail Pharmacists 16,000
Number of Wholesalers 1,300
Private Sector 90% available drugs
Government Utilize 10% available drugs
Source: Bangladesh Pharmacy Council (BPC), Annual Report - 2009
Sector Analysis | Pharmaceutical 5

Growth
There are numerous areas in which Bangladesh may take pride, and the pharmaceutical business
is one of them. The pharmaceutical industry is the second greatest contributor to the government's
coffers.

According to the Directorate General of Drug Administration (DGDA), the domestic drug market
share was 175 crores in 1981 and had risen to 325 crores by 1985. According to an IMS estimate,
the size of the Bangladeshi market has increased from BDT 1730 million in 1982 to more than
BDT 113 billion ($1.5 billion) in 2014. With a growth rate of around 11.37% each year.

The domestic market for pharmaceutical goods in Bangladesh has been growing in recent years,
with a market size of BDT 260.1 billion (USD 3.1 billion) expected in 2019. (Source: IQVIA
Report). However, because the IQVIA study does not contain statistics on homeopathy, unani,
ayurveda, or herbal medicine, this number does not reflect the overall market size. In 2020, it is
expected to increase by 7.6%, reaching $3.54 billion. The generic medicine industry is largely
controlled by generic pharmaceuticals, which account for 71.4% of total sales. This is followed by
over-the-counter medication sales, which account for 21.3% of the overall market, whereas
patented pharmaceuticals account for just 7.3% of the total market.

45

40 38.21

35

30
23.8 23.6
25
20.51
20 16.83
13.5 13.85
15
9.97
10 8.12 7.45

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Figure 2.1. Pharmaceutical Industry Annual Growth Rate (%) (2009 – 2018)
Source: International Management System

The pharmaceutical business, Bangladesh's next multibillion-dollar potential, has developed

dramatically in the previous five years. According to IMS Health Report, the historical six-year
CAGR was 14.6% from 2013 to 2018, and the historical five-year CAGR was 15.6% from 2014
to 2018. Industry growth was sluggish in FY 2018 as there was regulatory pressure for the national
Sector Analysis | Pharmaceutical 6

election, so pharma companies can’t pass through higher API prices to end consumers.
Bangladesh's pharmaceuticals sector is expected to increase 15% year on year to $5.11 billion by
2023, according to industry analysts, spurred by significant expenditures by local businesses
seeking a larger part of the global market. In a few years, Bangladesh will be a significant
worldwide center for high-quality, low-cost generic pharmaceuticals and vaccines.

From the graph below we can see the year-by-year increase in the quantum index of our
pharmaceutical manufacturing industry.

1000
893.55
900

800
676.27
700

600

500 459.96
422.55
400 345.45
314.46
284.22
300

200

100

0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

Figure 2.2. Quantum Index of the Pharmaceutical Industry (Base Year 2005-06 = 100)
Source: Statistical Yearbook Bangladesh 2020

Contribution in GDP
According to the Bangladesh Bureau of Statistics, the industry contributed 1.83% in 2017-18 and
ranked second in terms of national gross value addition in 2016-17 and 2017-18, only behind
Readymade Garments (RMG). The pharmaceutical product was named 'the product of the year'
for 2018 by Bangladesh's prime minister on January 1, 2018. According to a recent study published
in the Dhaka Tribune, the industry is anticipated to develop at a 15% annual rate to reach 43,435
crore BDT by 2023, owing to increased investment by local firms seeking a larger part of the
global market. Bangladesh's pharmaceutical sector is substantially shielded from foreign
competition, as comparable medications made domestically are prohibited from being imported.
This industry is the country's second-largest revenue generator. At the same time, the industry
employs the greatest number of white-collar workers.
Sector Analysis | Pharmaceutical 7

1.865
1.86
1.86
1.855
1.85
1.85
1.845
1.84
1.84
1.835
1.83 1.83
1.83
1.825
1.82
1.815

2013-14 2014-15 2015-16 2016-17 2017-18

Figure 2.3. Pharmaceutical Industry’s Contribution to GDP of Bangladesh

Source: Bangladesh Bureau of Statistics and EBLSL

The graph below illustrates the size and growth of Bangladesh's GDP as well as the size and growth
of the pharmaceutical industry from year to year. This graph depicts the period from 2013-14 to
2017-18. Bangladesh's pharmaceutical sector is growing faster than the country's GDP.

35
30
30

25
20.51
20
14.32 14.02 13.9
15 12.07 12.81
10.78
10 7.45
6.19
5

0
2014 2015 2016 2017 2018

Nominal Growth Rate % Pharma Industry Growth %

Figure 2.4. Nominal GDP vs. Pharma Industry Growth Rate

Source: IQVIA, Bangladesh Bureau of Statistics and EBLSL Research

Pharmaceutical spending per capita remained low in 2019, at USD 18.9. Until 2014,
communicable illnesses made up the majority of the epidemiology of this market (70%); however,
the profile is slowly but gradually changing towards non-communicable diseases. Cancer,
Sector Analysis | Pharmaceutical 8

musculoskeletal problems, chronic respiratory ailments, and psychiatric disorders are the most
common non-communicable diseases.

TRIPS and 1982 Drug Control Ordinance

According to WTO’s Trade-Related Aspects of Intellectual Property (TRIPS) agreement signed
Between 2006 and 2016, 49 Least Developed Countries (LDCs) were permitted to export patent-
free pharmaceuticals to any nation under the WTO's Trade-Related Aspects of Intellectual
Property (TRIPS) agreement, which was agreed in Doha in 2002. Bangladesh was able to reverse
engineer the original copyrighted pharmaceutical to make generic versions of that drug without
first obtaining permission from the inventor. Bangladesh also has the option of exporting to any
country if the drug is not patented in that country. Bangladesh has been excused from the World
Trade Organization's requirements to adopt patents and data protection for pharmaceutical items
until January 2033 since it is a least developed nation.

No foreign business could provide knowledge to a local producer if they did not have their own
set up in Bangladesh, according to the Drugs (Control) Ordinance of Bangladesh 1982.
Furthermore, foreign firms are prohibited from marketing imported medicinal items in the nation
as a result of this law. All of these factors have contributed to the expansion of Bangladesh's
pharmaceutical industry.

Growing GNI Per Capita and Capita Healthcare Expenditure

100
88 90.6
90 83.2
75.8 77.9
80 71
70
60
50
40
30
20
10
0

2011 2012 2013 2014 2015 2016

Figure 2.5. Per Capita Healthcare Expenditure, PPP (Current International $)

Source: World Bank and EBLSL Research

In the previous ten years, Bangladesh's per capita healthcare expenditure rose at an average rate of
11.0%, while its gross national income (GNI) per capita expanded at a rate of 6.0%. The
Sector Analysis | Pharmaceutical 9

Bangladeshi people's average income has risen. According to World Bank data, per capita GNI
increased to $1909 in the 2019 fiscal year, up from $1,750 in the previous year. From 2018 to
2019, the average salary increased by 9.08%. People have more money to spend on medical
expenses when their income levels rise.

Population Growth and Rapid Urbanization

74
71.8 71.9
72
69.9
70
68.5
67.2 67.2 67.2 67.4 67.5
68
65.8
66 65.1

64

62

60
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Series 1

Figure 2.6. Out-of-pocket Healthcare Expenditure (% of Current Healthcare Expenditure)

Source: World Bank and EBLSL Research

Bangladesh's average annual population growth rate from 2012 to 2018 was 1.1%, according to
the World Bank and World Meter. Bangladesh's pharmaceuticals sector is growing as a result of
this. Out-of-pocket healthcare costs account for 71.8% of healthcare costs. We anticipate that
private healthcare spending, as well as out-of-pocket spending, will rise in the midterm as the
urban population grows.

Upward Demand of Generic Drugs

In each of the previous three fiscal years, the country's real GDP growth rate has exceeded 7.5%.
During the same period, the pharmaceutical industry grew faster than the overall economy. We
estimate that the industry will expand by 15% in the following years. Generic medicines are
identical to brand-name pharmaceuticals in terms of dose, intended usage, adverse effects, risk,
safety, and strength.

Increase in Modern Healthcare Facilities

Bangladesh's medical and pharmaceutical institutions are embracing contemporary technologies.
This will have a significant impact on Bangladesh's pharmaceutical sector.
Sector Analysis | Pharmaceutical 10

Health Awareness of Mass People & Changing Lifestyle

Through social media, the increasing contribution of Generation X (born 1965-1979) and
millennials (born 1980-1994) to the overall population has shifted views on health awareness.
People are more health-conscious now than they were previously. They go to the doctor anytime
they have a problem, which will help Bangladesh's pharmaceutical industry flourish. The lives of
city inhabitants and urban residents are quickly changing.

Demographic Shift
People's life expectancy has grown considerably. Bangladesh's life expectancy at birth is 72.81
years in 2017, up from 66.4 years in 2002. As people's life expectancies have increased, so has the
number of older citizens. Chronic illnesses are anticipated to rise significantly as Bangladesh's
lifestyle and environmental variables change. Furthermore, to live a longer life, individuals used
to visit a physician regularly and take various medicines according to the doctor's prescription.

Changing Diseases Profile

166 100%
163.5
164 90%
161.36
162 80%
159.67
160 157.97 70%
158 156.26
156 154.52 60%
154 152.76 50% Rural
152 151.01
40% Urban
150 30%
148
20%
146
144 10%
0%
2012 2013 2014 2015 2016 2017 2018 2019 1971 1981 1991 2001 2011 2018 2019

Figure 2.7A. The population of Bangladesh Figure 2.7B. Urban Population (% of Total
(in Million) Population)
Source: World Bank and EBLSL Research Source: World Bank and EBLSL Research

The growth of lifestyle illnesses may be attributed to three primary factors: demographic shifts,
lifestyle changes, and increasing urbanization. In 2018, the urban population accounted for
36.863% of the overall population, a figure that is steadily increasing. People who live in cities
have greater purchasing power and are more health concerned than those who live in rural areas.

Bangladesh's disease profile is undergoing significant changes. Noncommunicable diseases

(NCDs) are on the rise, and acute illnesses are giving way to chronic illnesses. Diabetes, renal
failure, stroke, heart attack, and cancer are all major NCDs. The ongoing care necessary for chronic
Sector Analysis | Pharmaceutical 11

conditions, as well as the frequently costly therapeutic initiatives, can put a strain on the health
system and result in potentially catastrophic out-of-pocket expenses for families.

In Bangladesh, two bodies oversee medicines and pharmacies. The Directorate General of Drug
Administration (DGDA), which is part of the Ministry of Health and Family Welfare, is the
country's drug regulating authority. All operations connected to the import and export of raw
materials, packaging materials, manufacture, sale, pricing, licensing, and registration of all types
of medicine, including Ayurvedic, Unani, herbal, and homeopathic systems, are regulated by the
DGDA.

In 1976, the Pharmacy Ordinance Act created the Pharmacy Council of Bangladesh (PCB) to
regulate pharmacy practice in Bangladesh. The International Pharmaceutical Federation and the
Commonwealth Pharmaceutical Association are both members of the Bangladesh Pharmaceutical
Society. According to the National Drug Policy (2005), current World Health Organization Good
Manufacturing Practices (GMP) shall be rigorously observed, and manufacturing units will be
examined by the DDA regularly. Restrictions on imported pharmaceuticals (where they are
manufactured by four or more local businesses), a prohibition on local manufacturing of roughly
1,700 drugs that are considered non-essential or dangerous, and stringent price limits on 117 major
medicines are among the primary regulatory elements.

With only 33 members when it was founded in 1972, the Bangladesh Association of
Pharmaceutical Industries - BAPI (Bangladesh Aushad Shilpa Samity in Bengali) has played a
critical role in the sector's growth. BAPI is now a highly powerful association, with 144 firms as
members.

Currently 400 pharmaceutical companies are here in Bangladesh. Among these 400 companies,
276 companies are registered and operational. 97% of the requirement of total medicine is met by
the companies operating in Bangladesh. Only 3% of the required medicines are imported (Nazim
et al.). Unlike the other sectors, the pharma industry is largely dominated by the local players.
There were 5 MNCs in the market previously, but currently there are 3 MNCs only after two major
MNCs left their business due to possible LDC graduation (figure A1 in Appendix).

Currently the market size is 245 billion. More than 50% of the market share is obtained by the
large 6 pharmaceutical companies. These companies are Square, Incepta, Beximco, Healthcare,
Opsonin and Renata (Haroon, 2021).

The Pharmaceuticals market is concentrated among few local companies only and the entry barrier
is higher due to large capital investment and legislative bindings. (EBLSL Research Team, n.d.)
Sector Analysis | Pharmaceutical 12

Pharmaceutical companies in Bangladesh usually provide branded-generic products. So,

established brands are able to charge premium prices for their products (Faisal, 2019).

17.00%
Square Pharmaceuticals

Incepta

Beximco Pharmaceuticals

Healthcare
45.97% 11.60% Pharmaceuticals

Opsonin Pharma

Renata

9.00% Others

6.30%

5.03% 5.30%

Figure 2.8. Market Share of the Pharmaceutical Companies in Bangladesh

Threat of new entrants-Low

It is highly difficult for any new company to enter the pharmaceutical industry because of heavy
capital requirement, regulatory permissions, customer loyalty to the existing brands, and leading
players' hold over the distribution channels.

Threat of substitute product- High

There are many brands available for the same medicine. Though customers are loyal to the leading
brands and are not comfortable trying products from a new company, they easily switch from one
Sector Analysis | Pharmaceutical 13

brand to another if they do not find the desired brand. The retailers also tend to switch easily
depending on their benefits.

Threat of New Entrants

4
3
Rivalry among 2 Threat of
Competitors Substitutes
1

Bargaining Power of Bargaining Power of

the Supplier Buyers

No Threat 0
Very Low 1
Low 2
Moderate 3
High 4
Very High 5

Figure 2.9. Competitive Structure of the Pharmaceutical Industry

The bargaining power of buyers- Very Low

The customers choose their product depending on the medicine prescribed by the doctors and the
companies don’t usually vary the prices of the same product much. Also, the customers are
scattered and not concentrated.
Sector Analysis | Pharmaceutical 14

The bargaining power of the supplier: High

Bangladesh is highly dependent on China and India for sourcing raw materials. The only
alternative source is Europe which costs higher. High switching cost and concentration of the
supplier gives them high bargaining power. This may change in future as Bangladesh is building
an API park in Munshiganj.

Rivalry among the competitors: High

Top 20 players dominate the pharmaceutical industries with top 6 market leaders with more than
50% share. Each of them produces all kinds of required medicines with different brand names.
Competition is fierce in this industry.

Prior COVID, in the FY 2018-19, Bangladesh exported 130 million USD of pharmaceutical
products. This was a significant growth of 25.6% compared to the approximate 103 million USD
of export in the previous year. 1.46% of total annual export earnings depend on this industry
(Bhuiyan et al., 2019).

140 130

120
103.46 16% YOY
100
89.17
25.6% YOY
80 72.64
69.24 23% YOY
60
5% YOY

40

20

0
2014-15 2015-16 2016-17 2017-18 2018-19

Figure 2.10. Pharma Export in Mn USD and Growth

Source: Export Promotion Bureau

According to Bangladesh Export Promotion Bureau, Bangladesh exported pharmaceutical

products to 147 countries in the fiscal year 2018-19. Among 147 exporting countries, the top 7
countries (Myanmar, Sri Lanka, Philippines, Vietnam, Afghanistan, Kenya and Slovenia)
constitute 60.32% of total pharma exports. Rest 39.68% comes from other countries (EBLSL
Research Team, n.d.).
Sector Analysis | Pharmaceutical 15

18 16.4
16
14 13.28

12 10.51
10
8 6.68
6 4.96
4.16 4.05 3.51
4 2.91 2.52
2
0

Figure 2.11. Export Destination of Pharmaceutical Products (in Million USD, 2018-19; 9
Months)
Source: Export Promotion Bureau and EBLSL

An interesting fact is, not all the leading players in the local market are leading in exporting their
products. Instead of square, Beximco is the leading player here. Square follows Beximco as the
second highest exporter, followed by ACME and Renata. Incepta, Beximco Pharma and Square
export their products to 60, 55 and 42 countries respectively. Top three generic drug manufacturers
(Square, Incepta and Beximco) have already received approval from USFDA to export drugs to
the USA (CFA).

1600 1477 1451

1387
1400
1200 1078 1127
990
1000
819
800
608
600 514
450
372
400 319

200
0
BXPHARMA SQUARE RENATA ACME

FY 16 FY 17 FY 18

Figure 2.12. Export of Major Players in Mn BDT

Source: Annual Report of Respective Companies and EBLSL
Sector Analysis | Pharmaceutical 16

Impacts
Pharmaceutical industry is one of the very few sectors in Bangladesh that at least saw positive
growth during this covid-19 pandemic. But the fast-growing industry slowed significantly in 2020
during the initial shock of the pandemic. The life-saving drug market expanded at 6.5% in the third
quarter of 2020, down from the previous growth rate of 10-12 percent (Haroon, 2021). The whole
country went under lockdown from March 26, 2020 to May 31, 2020 due to the pandemic. From
April to July the healthcare system of Bangladesh, centralized in urban areas, was virtually
paralyzed. Doctors stopped visiting clinics and chambers for months until July, nurses and other
healthcare workers almost stopped providing services to patients during that period. Even people
were reluctant to visit doctors and physicians to avoid catching the corona virus. As a result, the
sales of prescription drugs dropped, whereas the sales of pharmaceutical industry in the country is
mostly dependent on prescription drugs. This has led to the slow growth of this one of the fastest-
growing industries of Bangladesh. Although a large number of urban people consumed a lot of
vitamins and antibiotics to build immunity against the coronavirus, these drugs are cheaper thus
making it difficult to create much value to the totals. Again, generally covid patients do not need
specific drugs, only some cheaper drugs have been prescribed at the hospitals and often non-covid
patients were neglected to get healthcare services during that period. Furthermore, in the early
stage of covid-19 import-export supply chain was disrupted due to the world-wide lockdown, as a
result, the industry faced challenges in importing raw materials. Although this also added to the
downward situation of the industry, due to proper planning and forecasting, efficient management,
and quick alternative source selection the country did not face a medicine crisis.

Although the market dominating players in the industry found their sales volume less-affected,
many medium to small companies even saw negative growth. In 2020, the top 15 companies
contributed 83.08% of the total sales whereas in 2019, the figure was 79.48%, which means the
big players in the industry did well during the coronavirus pandemic (Sadeq, 2020). The big firms
have branded products and over-the-counter products, and these products have more or less
maintained sales, thus keeping their financial state almost stable.

Aftermath
However, despite all these challenges pharmaceutical companies tried to keep their regular
operation going on and supplied essential drugs to the markets both at home and abroad. After July
the industry started to turn around as doctors and physicians returned to clinics and chambers,
providing service to the people while maintaining proper hygiene resulting in an increase in
countrywide demand for prescribed medicines. The profits soared up to 76% in September
compared to the second quarter of 2020 (Haroon, 2021).

Bangladeshi pharmaceutical companies like Beximco Pharma, Incepta, Square, Eskayef and
Beacon played a very praiseworthy role in manufacturing anti-covid medicines such as, the generic
Sector Analysis | Pharmaceutical 17

version of Remdesivir, Favipiravir, Ivermectin, and the industry earned 150 crores from the export
of these medicines. Some of the firms, who produce and sanitizers, Isopropyl Alcohol,
Hydroxycholoroquine, etc., could bring these products in the market at short notice in adequate
quantities, and such hygiene products saw their sales climb up during the initial period of the
pandemic as the demand for these products were high and investors bought their shares sensing
the rise in income of the companies amid the pandemic. These products also drew the attention of
both developing and developed countries, and brought better results in the export market too. With
all these, the abundant sale of vitamin supplements and antibiotics has added value to the total
sales.

Among the market dominating players in the industry, there is no doubt that Beximco group has
been the biggest beneficiary of the global coronavirus pandemic. When the world was shattered
by the fear of coronavirus, in May, the drug maker grabbed global headlines for being the first
company to market the antiviral drug Remdesivir that showed promising results in treating covid-
19 patients. The company has been supplying the drug and other medications to treat covid-19 at
home, and exporting to other countries. Three months later it announced a covenant with Serum
Institute of India to be the exclusive distributor of Oxford’s vaccine in Bangladesh. On November
5, a trilateral memorandum of understanding (MoU) was signed among the government of
Bangladesh, Serum Institute of India and Beximco Pharmaceuticals to collect thirty million doses
of covid-19 vaccines from Serum (Habib, 2020). After the two announcements, Beximco
Pharma’s stock has been much coveted among the investors. Beximco Pharma’s vaccination
agreement with the government boosted investor’s confidence, as a result Beximco Pharma has
been the top choice for stock investors as they believe the company will make higher profits in the
days of administering covid-19 vaccine in Bangladesh. Since June 2020 its share price has been
on the rise and soared more than two and a half times. Their latest stock price is Tk 180, in contrast
to Tk 70.3 on June 1. Beximco Pharma saw its net profit soar more than 41% in the first nine
months of FY20-21 to Tk 370.60 crore and earnings per share (EPS) was Tk8.23 for Jul’20-Mar’21
against Tk5.84 for the same period last year. In just the first six months of its 2020-21 financial
year, which runs from July to June, it has logged in more profit than it did in full years since 2012.
Beximco is not the only Bangladeshi company offering advanced products in response to the
coronavirus pandemic, however, it is unique in producing both COVID-19 drugs and PPE.
Beximco flagged off its PPE export with a batch of 6.5 million medical gowns custom made to the
specifications of the US Federal Emergency Management Agency. Another reason for the
spectacular surge in profit was higher shipments of personal protective equipment (PPE). So, it is
no wonder that the share price of Beximco Pharma has been on the rise.

The huge drawback is Beximco Pharma is the sole distributor of Serum's vaccine in Bangladesh.
But now India has imposed a ban on vaccine export followed by a severe resurgence of Covid-19
in the country, Bangladesh had to go for alternatives. So local pharmaceuticals are pushing the
government to allow domestic production of generic Covid-19 vaccines. Now Beximco Pharma is
Sector Analysis | Pharmaceutical 18

in talks with Serum Institute of India about producing the Oxford-AstraZeneca vaccine in
Bangladesh, and Incepta is in talks to produce China’s Sinovac vaccine. While that initiative is
waiting for the government of Bangladesh and WHO’s approval, local companies like Renata,
Incepta and Orion are taking leads to bring and administer the distribution of Moderna’s, China’s
Sinovac and Russia’s Sputnik V vaccines respectively.

Strengths
Availability of Cheap Labor Force
Bangladesh has a huge population and this is a positive factor when it comes to availing low-cost
labor. It is considered as one of the major strengths of Bangladesh’s pharmaceutical sector
(Chakma, 2020).

Quality and Global Image

Bangladesh’s produced medicines have a better global image and almost same quality as of India
and Egypt (Chakma, 2020).

Low Utility Cost

The overall utility cost in Bangladesh is lower than the competitive countries and thus it works as
a stronghold for the pharmaceutical sector (Chakma, 2020).

Economic Growth
The overall economic growth of Bangladesh has contributed to rise in life expectancy, lifestyle
change, increasing per capita income and with that growing number of patient population has been
a key driver for the booming consumption of local drugs (Chakma, 2020).

Challenges
Bangladesh possesses US$2 billion which is around 1 percent of its GDP from its pharmaceuticals
industry which mostly produces off patent generic and on patent medicines and supplies them at
home to fulfill almost 98% of the local needs and also exports to over 30 countries. Though the
sector is immensely important for the growth of Bangladesh’s economy it faces key challenges as
Bangladesh is on a transit period from being least developed country to the next stage (Ovi &
Mahmud, 2019). The major challenges that Bangladesh’s pharmaceuticals sector faces are lack of
raw materials (API) supply from the local market, patent relief which is almost on the last stage,
accredited drug testing laboratory, bio equivalence test facility and market regulations.

High Dependence on Imported API

Bangladesh imports almost 99% of active pharmaceutical ingredients (API), which is the main raw
material of this industry, from China and India. To compete in the global market domestic supply
Sector Analysis | Pharmaceutical 19

of API is a must. Bangladesh can save up to 70% of its raw materials import cost by producing
API locally (Ovi & Mahmud, 2019).

Patented Drug Manufacturing

Bangladesh, a least developed country, enjoys a license free drug manufacturing for the patented
drugs as per the TRIPS accord by WTO. This privilege is going to finish very soon when
Bangladesh graduates from the LDC status so the open market challenge is going to be a major
issue due to the high cost of patented drug manufacturing for the pharmaceutical companies as a
whole (EBL Securities Ltd., 2019).

Modern Drug Testing Laboratory

Lack of a modern, well equipped, accredited drug testing laboratory is affecting the export of
pharmaceutical companies. As a result of this foreign buyers and regulatory bodies often question
the central monitoring as most of the drugs are tested outside of the country (Mohiuddin, 2019).

Bioequivalence Test Facility

In many countries, bio equivalence test of a product is a must to register the product for sale. As
there is no such facility here in Bangladesh the companies need to carry out those tests in foreign
countries for a huge change. Thus, many companies do not even want to produce such drugs that
requires a bio equivalence test which hampers the export volume of the country (Mohiuddin,
2019).

Problem Related to Marketing

Due to the low or no incentive package for the medical representatives the turnover rate is very
high and thus the impact of marketing is not visible in the product prices. Also lack of proper
government laws and less effective implementation by the drug administration makes it hard to
cover the whole marketing ideas (Bhuiyan et al., 2019).

Problem Related to Export

In the ports lack of use of proper technology and also the irresponsibility of customs officers is a
hindrance to the proper and timely export of materials (Bhuiyan et al., 2019).

Problem Related to Power Development

The timely supply of power is a major concern for the factory owners in Bangladesh as the
government is lacking experienced manpower and the willingness to support the cause makes it
harder to properly maintain the power supply (Bhuiyan et al., 2019).
Sector Analysis | Pharmaceutical 20

Problem Related to Foreign Competition

Foreign companies have better technology and superior instruments which is keeping them ahead
of the local companies also the foreign companies have their own local market so they can absorve
some losses here and keep moving forward (Bhuiyan et al., 2019).

Regulated Markets
There are markets which requires highly standardized documents to register pharmaceutical
products such as the USA, European Union, Australia, Japan and other highly or moderately
regulated countries and regions. These criteria are difficult to meet for the majority of the small
companies of Bangladesh which are not sophisticated and accredited and often lack proper quality
control and standard manufacturing process and above all highly skilled professionals are
unavailable (Mohiuddin, 2019). Also, the following challenges are faced while entering into the
market of USA, UK and EU:

i. Buying the Abbreviated New Drug Application (ANDA) for USA market and the
Marketing Authorization for UK and EU market is very costly as there is an advance
income tax of 30% and 15% vat (Alam, 2019).
ii. There is a lack of mutual acceptance of Good Manufacturing Practices (GMP) of the
Directorate General of Drug Administration (DGDA) (Alam, 2019).
iii. There is limitation of Capital Account Convertibility which is essential to have an office
and get the tax and resident benefit of the target market (Alam, 2019).
iv. Limitation of sending expenses for the office in the foreign market which is about USD
30000 per year (Alam, 2019).

Covid-19 Restrictions and Challenges

Due to the emergence of the global pandemic Covid-19 the pharmaceutical companies faced
various challenges like the dip in the demand of prescribed medicine due to the lockdown imposed
by the government and also complications related to the sourcing of vaccines and also the API
sourcing.

The government of Bangladesh contracted with the Serum institute of India for 30 million vaccines
but due to the rapid increase of infection in India they stopped the promised supply of remaining
23 million doses of vaccine and it created a huge uproar as people with 1st dose of vaccines were
due to take the second one but there was no vaccine supply (Das, 2021).

Bangladesh is on the verge of graduating from its LDC status to the next level in 2026 which was
previously 2024 and extended for 2 years upon the government’s request due to the adverse impact
of Covid-19 in the country’s economic conditions. With the graduation Bangladesh will lose all of
its quota free and patent free access in the foreign markets. To counter this challenge government
Sector Analysis | Pharmaceutical 21

has formed a special committee to oversee the smooth transition and also to find out new
opportunities and action plans.

Patent Exemption and TRIPS Agreement

The intellectual property agreement (TRIPS) by WTO was due to run out in 2016 but has been
extended to January 2033 which is a massive relief at this moment for the exporter of Bangladesh’s
pharmaceutical sector. Thus Bangladeshi manufacturers can produce the generic drugs which is
about 80% of the drugs produced in Bangladesh without having to pay for the patent. Along with
this more than 1000 products received the necessary registration for export which is also a massive
boost for the local pharmaceutical companies.

Another opportunity is upcoming when drugs worth more than USD 251 billion are coming off
patent which will allow Bangladesh to produce these even after the completion of TRIPS
agreement (Rashid,2019).

Covid-19 Vaccine and Future Impact

Due to the emergence of Covid-19 the production of vaccine is seen as a huge opportunity for the
pharmaceutical sector when Beximco, a private company of Bangladesh went on to discussions
with Serum institute of India to produce the Oxford vaccines here in Bangladesh. It is considered
as a pathway to enter the global vaccine market (Molla, 2021).

Tax Exemption by NBR

The National Board of Revenue has issued an order allowing the import of API or the basic drugs
by the local pharmaceutical companies without paying any value added tax which will be effective
until 2025. This is an opportunity to focus on the local API production and create a strong foothold
for the future API markets both local and international (VAT waiver for API producers, 2019).

Government Initiatives
The government committee formed under the General Economic Division of the Planning
Commission has been working relentlessly to implement the growth strategy of the eighth five-
year plan (2020-2025) by putting most priority on the diversification of production and market
base, by addressing the anti-export bias by easing the trade barriers (General Economics Division,
Bangladesh Planning Commission, 2020).

To improve the traction of product diversification the Ministry of Commerce is focusing on the
following three trade policy reforms:
Maintaining export competitiveness-by addressing barriers like tariffs, regulations etc.
Strategy to reduce anti-export bias
Strategy to reduce anti-diversification bias
(General Economics Division, Bangladesh Planning Commission, 2020).
Sector Analysis | Pharmaceutical 22

API Park
As mentioned above, the pharmaceutical industry in Bangladesh is heavily dependent on the
suppliers for the RAW materials. To reduce this dependency, the Bangladesh government has
taken the initiative to build an Active Pharmaceutical Ingredient (API) Park. The project was
approved by the National Economic Council (ECNEC) in May 2008. This Park is supposed to be
ready in June 2021. The Park is being built under the public-private initiative with the Bangladesh
Association of Pharmaceutical Industries (BAPI) (CFA).

The pharmaceutical industry of Bangladesh has been witnessing significant growth in the last few
years. According to a report from a Dublin-based market insight and analysis firm, Research and
Markets, the pharmaceutical market of Bangladesh is expected to become a $6 billion market by
2025 with an absolute growth of 114 percent from its 2019 levels. It is expected to have a
compound annual growth rate of more than 12 percent during the 2019-2025 period. A majority
of this growth will be contributed by local companies with a market share of more than 90 percent.
According to a report by Bangladesh Investment Development Authority (Bida), thanks to the
increasing purchasing power of the growing middle and upper-middle classes, the demand for
healthcare services is growing at about 21 percent annually. This notable change is due to the
consequence of innovation in the science and research and development sector. Rise in life
expectancy, growing per capita income, changing disease profile, population growth, lifestyle
changes and increasing patient population are some of the key drivers that are boosting
consumption in the local market, the Research and Markets said in its report.

In addition, the report said, in the upcoming years, the government of Bangladesh will play a
significant role in the rapid growth of the pharmaceutical industry by providing favorable policies
for easy drug approval, production and marketing of new products. The government is focusing
on reducing the country's dependence on the import of raw materials. The establishment of an API
Park will act as a turning point for this purpose. It is expected that the development of the API
Park will be complete by the next two years, which will reduce the cost of the import of raw
materials. The report said the share of generic drugs is expected to surpass 85 per cent by 2025,
which will further strengthen the dominance of local pharmaceutical companies in the market.
Moreover, local companies are investing and developing dedicated facilities for specialized drugs
for treating diseases such as cancer (Chakma, 2020).

However, Bangladesh is facing a huge issue regarding covid-19 vaccines as Beximco Pharma is
the only distributor of the Astrazeneca vaccine that was set to come from India and now India has
imposed a ban on vaccine export after only providing three million vaccines followed by a severe
resurgence of Covid-19 in the country. So Bangladesh is in need of other alternatives for vaccine
collection and production of generic vaccines locally. This has brought a new opportunity for the
pharma companies of Bangladesh. But among all the companies only three of them, Incepta,
Sector Analysis | Pharmaceutical 23

Popular and Healthcare Pharmaceuticals have the facility to produce the vaccines locally. Also,
the production process will be possible only after the government of Bangladesh and World Health
Organization (WHO) approves. Beximco Pharma is in talks with Serum Institute of India to
produce Oxford’s vaccine locally, and Incepta Pharmaceuticals is in talks to produce the sinovac
vaccine of China. Furthermore, Beximco, Incepta, Renata, Orion Pharmaceuticals are investing in
vaccine import and distribution.

Recommendations
The preceding discussion made it clear that the pharmaceutical companies and government should
put hand in hand and adopt effective measures to capture the market opportunities and tackle the
threats that are looming around and for that the following actions are suggested.

Market Expansion: Each and every pharmaceutical company faces the growing demand of drug
availability and thus they should take on proper R&D and try to increase their market share. An
effective market development plan can bring success in capturing the foreign markets especially
in the LDC markets. (Bhuiyan et al., 2019)

Joint venture establishment: Joint venture program will be beneficial for the transfer of
technology and also attract foreign investment. Necessary policy should be adopted to transform
the industries according to the guidelines of WHO for producing generic medicine. New
entrepreneurs should be encouraged to establish a plan to meet the demand of patented drugs by
getting the compulsory licensing as per the regulations of US FDA and UK MHRA to earn the
norms of export in prospective markets under government support and supervision. (Bhuiyan et
al., 2019)

Human Resource: Human resource is a major factor in gaining the greater market share both in
the local market and also in the foreign markets. So to make the efficient human resource necessary
development programs and training should be conducted by both the government and industry.
(Sultana, 2016)

Export Promotion: Export Promotion Bureau of Bangladesh can arrange international fair on a
yearly basis to promote the pharmaceutical sector of Bangladesh and also initiatives taken by BAPI
should be made more frequent to make the high-level delegation team to gain foreign industry
knowledge. (Mohiuddin, 2019)

E-commerce inclusion: The boom in E-commerce can play a positive role in gaining market share
and thus companies should come forward to tackle the doubts about authentic medical equipment
and medicines in online platforms in the customer minds. (Mohiuddin, 2019)
Sector Analysis | Pharmaceutical 24

Conclusion
The main aim of this study was to present a brief review of the pharmaceutical industry of
Bangladesh. Data collection method for this paper has been both primary and secondary in nature.
This paper is limited to the analysis of the pharmaceutical industry of Bangladesh, so comparisons
between the performance of this industry in Bangladesh and that in other countries are beyond its
scope.

As with every other sector, the pharmaceutical sector of Bangladesh has its own challenges and
opportunities. To address the challenges individual and combined steps and initiatives from both
the industry owners and government should be taken. In case of the opportunities the entrepreneurs
and government both work together towards a sustainable growth in future while keeping in mind
the limitations and strengths of the sector. The covid-19 pandemic is a war and it has challenged
the dimension of almost every wing of the pharmaceutical industry of Bangladesh, and of course
the industry got hurt. The industry saw slow growth, officials and workers were infected and
suffered, but they remained fearless and got the courage to face all the challenges. The industry
has proven itself during the pandemic and is ready to respond to any situation, and bring better
outcomes both for the people and for the industry itself. Government has already taken some
initiatives collaborating with the industries that are going to open more opportunities for this
industry in the upcoming years. If such positive approaches combine with the discussed
recommendations like a focus on R&D and developing better human resource, this industry can
be one of the major strengths of the economy of Bangladesh.
Sector Analysis | Pharmaceutical 25

Alam, M. Z. (2019). Bangladesh Pharmaceuticals Industry and Global Prospect. THE COST AND
MANAGEMENT, 47(01). Retrieved from http://www.icmab.org.bd/wp-
content/uploads/2019/12/2.Competitiveness.pdf
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content/uploads/2019/12/2.Competitiveness.pdf
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BANGLADESH, 1982 to 2020. CENTRE FOR DEVELOPMENT STUDIES. Retrieved
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Industry-of-Bangladesh.pdf
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General Economics Division (GED). (2020). Eighth Five Year Plan (July2020-June2025).
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Sector Analysis | Pharmaceutical 26

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Sector Analysis | Pharmaceutical A

Table A1: Comparison of GPD grwoth and Pharmaceutical industry growth in Bangladesh
2013-14 2014-15 2015-16 2016-17 2017-18
GDP (BDT
13,437 15,158 17,329 19,758 22,505
billion)
Nominal Growth
12.07 12.8 14.3 14 13.9
Rate (%)
Pharma Market
105,864 119,548 156,401 187,556 205,118
(BDT Million)
YoY Pharma
Market Growth 8.5 13 31 20 9
(%)
Source: IQVIA and Bangladesh Bureau of Statistics

300 35%

30%
250

25%
200

20%
150
15%

100
10%

50
5%

0 0%
2014 2016 2018 2020

Market Size (Billion USD) Growth

Figure A1. Market Size of the Pharmaceutical Industry

Source: CFA Institute Asia Pacific Research Exchane